Inflation hit its highest rate for more than one-and-a-half years at 3.4 percent during September 2010, according to the latest figures released by Government.

The Department of Statistics' Consumer Price Index revealed that inflation climbed to its highest level since February 2009 of 4.4 percent, driven largely by the cost of foreign travel.

The average cost to travel overseas during September increased 16.6 percent as residents paid more for hotel accommodation and airfare, with the rate of price rise for the sector up 7.4 percent.

The health and personal care and rent sectors also impacted strongly on the annual rate of inflation, with price shifts of 8.7 percent and 1.6 percent respectively.

On a month-to-month basis, foreign travel costs jumped 21 percent in response to rising airfares among major carriers and steeper hotel rates in gateway cities. But in contrast gasoline prices fell by three cents during the month for both the premium and mixed blends. As a result, the transport and vehicles sector climbed sharply by 7.1 percent.

The education, recreation and reading sector also increased 1.5 percent due to the seasonal rise in educational costs, as average fees for local private school tuition rose 4.8 percent and US college tuition was up four percent.

The health and personal care sector advanced 0.2 percent in September in response to higher personal care services, with the average cost of facials, manicures and massages increasing 3.9 percent, while the cost of lady's hair styling services rose 1.6 percent.

The rent sector inched up 0.2 percent as well, down to a 2.5 percent increase in the repair and maintenance costs for housing.

Similarly, the household goods, services and communications sector edged up 0.2 percent for the month, as the average cost of child day care services rose 2.3 percent versus the price of household supply products declining 0.2 percent.

The fuel and power and clothing and footwear sectors both remained unchanged from the previous month.

However, there was some good news for smokers and drinkers as the tobacco and liquor sector decreased 0.1 percent, with the average price of wine down 0.8 percent, offset by a 0.4 percent increase in the price of beer and a 0.1 percent rise in the price of spirits during the month.

The food sector also fell 0.4 percent in September, with fresh oranges (-7.2 percent), fresh and frozen lamb (-3.8 percent) and fresh and frozen pork (-3.4 percent) among the most notable price changes.